Question by jekelnHide: Foreign earned income exclusion and Traditional IRA to Roth IRA conversion taxes/ capital gains?
I qualify for foreign earned income exclusion. This shows as a negative on income on the tax form. If I convert a traditional IRA to a Roth IRA, the IRS will withhold some taxes. Since my income is negative, can I get these taxes back at the end of the year? Alternatively, can my negative income offset capital gain taxes?
Using the Turbotax program, it takes the value from form 2555, and places it as a negative number in form 1040. Reading the instructions from form 2555, it says to place the value in parenthesis which indicates a negative, correct?
Best answer:
Answer by Jss
How can you have negative income unless you have loss from business or capital loss?
Just making sure that you are doing Form 2555 correctly.
Yes, it is always better to withdraw from IRA only when you have minimum income
For articles on your U.S. tax return, http://taxipay.blogspot.com/2008/04/list-of-articles.html
Know better? Leave your own answer in the comments!
Question by Clutchitude: Can I contribute to a Roth IRA if my earned income is outside the US?
I have both earned and unearned (dividend, investment, interest) income. My earned income is excluded from my US tax return since I’m physically outside the US. Can I still contribute to a Roth IRA?
Thanks, I thought so. I also assume I have to exclude either all or none of my foreign-earned income if it’s below the threshold.
Best answer:
Answer by Rob
Under the circumstances you have described No you cannot contribute to a Roth or a Tradional IRA
If your Foriegn Earned Income is excluded from your Tax return, it is not considered earned income for the purposes of contributions to either a Traditional or Roth IRA. You can only contribute if the earned income is taxable income.
See Publication 590
Who can contribute and the definitions of what is considered not taxable compensationhttp://www.irs.gov/publications/p590/ch01.html#d0e1025
Add your own answer in the comments!
I qualify for foreign earned income exclusion. This shows as a negative on income on the tax form. If I convert a traditional IRA to a Roth IRA, the IRS will withhold some taxes. Since my income is negative, can I get these taxes back at the end of the year? Alternatively, can my negative income offset capital gain taxes?
Using the Turbotax program, it takes the value from form 2555, and places it as a negative number in form 1040. Reading the instructions from form 2555, it says to place the value in parenthesis which indicates a negative, correct?
A) are taxed, but the interest in the fund accumulates tax free
B) reduce your taxes, but the interest income on the IRA is taxed in the year that it is earned
C) reduce your taxable income. the funds in the IRA and the return on the IRA are not taxed until the funds are disbursed in your retirement years.
D) are not taxed once when they are placed in the IRA and again when they are disbursed from the IRA
We’re beginning our retirement savings, and are not sure why our money market isn’t the best place for the money; I assume for tax reasons.
I have both earned and unearned (dividend, investment, interest) income. My earned income is excluded from my US tax return since I’m physically outside the US. Can I still contribute to a Roth IRA?
Thanks, I thought so. I also assume I have to exclude either all or none of my foreign-earned income if it’s below the threshold.
Roth ira, roth ira rules,what is roth,retirement plan roth ira 2010,roth ira qualification,what does a roth ira do,ira for minors,simple roth ira calculator